We covered Fundbox, a San Francisco based startup, in a previous Payments Journal article about e-commerce and small business credit needs. This particular posting appears in Finextra and announces an additional funding round of $176 million for the firm. Although it appears that the company falls just short of a ‘Unicorn’ valuation, we would suspect this will be changing soon.
“Fundbox is aiming to transform the B2B economy by freeing up trillions of dollars stuck in accounts receivable ‘limbo’. The firm applies automated machine-learning risk decisions, offering faster payments to sellers, and more flexible payment terms to the buyer.”
The Fundbox solutions set is an on-demand, machine learning-based credit granting system for small businesses, allowing for more flexible POS lending capabilities as buyers and suppliers interact. It’s an interesting model in the alternative lending space. We have covered the opportunity before, with the small business lending gap in the U.S. likely in the range of $50-100 billion. The Asian Development Bank had previously suggested that the global trade finance gap is in the range of $1.5 trillion, with a disproportionate impact falling on SMEs, as one might expect.
“’The remedy to this uncertainty is the ability to facilitate quick risk decisions, faster payments, and more flexible terms so our customers have greater predictability related to their revenue and cash flow. This new investment round validates the market opportunity and that our team is on the right path as we continue to focus on transforming B2B commerce for the better’…. says Eyal Shinar, founder, and CEO of Fundbox.”
We’ll be keeping an eye on the developing space as we move into 2020.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group